How TRAPs trap employees

Vikrant Shetty

July 4, 2023

1:28 pm

The objective of starting a new job is to attend training, learn as much as possible about the position and what it includes, and then be ready and able to work. After completing the required training and gaining some work experience, it will be clear whether the position is fit for the applicant or not. If they determine it isn’t worth attempting to stick it out then in that unpleasant scenario, they can submit a notice and resign from the job. However, this is not always the case. The possibility of an employer recovering the cost of training from an employee when the person quits the company soon after the training gets finished after employee resigns. This has drawn a lot of attention recently.

Employees or those looking for a job need to be aware of the training repayment agreement provision (TRAP). This article discusses TRAP in detail. Continue reading for more information.

Training repayment agreement provision (TRAP): What does it mean?

A contractual clause known as TRAP states that if a person quits their job within a particular time period after receiving training, they are responsible for paying back the employer for the cost of the training.

The concept of recouping training expenses is not new, but the high price of training, along with the employee’s desire to advance their career and better themselves in order to increase their marketability, is a key reason why this topic is high on the agenda.

In recent years, a lot of employees have been affected negatively by TRAPs. The cost to the employee, if a company recovers training fees, in certain situations, can reach thousands of dollars, and this is generally far larger than the money available to deduct from when the person quits, which causes further issues.

How do TRAPs function?

TRAPs are a contract between the employer and employee to recoup training expenses, whereby the company foots the bill, and the employee promises to reimburse the employer if they decide to quit within a predetermined window of time. The clawback is often done on a sliding percentage basis, and it gets less over time.

An employee reimbursement agreement, sometimes known as a training agreement, is a binding contract that specifies the terms and circumstances of any training you offer your staff. It determines how much training will cost and who will be accountable for paying for it.

A training agreement will provide a payback timeline to be followed in the event that an employee quits the organization before finishing their training if the employer is financing the costs. The longer a person stays with a firm after training, the less they are to repay because repayments are often based on a sliding scale. A training contract will also specify if training reimbursements can be taken out of a terminated employee’s last pay.

If there is a specific clause in the employment contract or in a separate written agreement to which the employee has approved, the employer may seek reimbursement from a departing employee for training costs or fees.

In some circumstances, the employment contract will contain an overall language that reserves the employer’s right to deduct money when the employee quits in relation to training that the company has funded. These clauses often have a very general character.

As an alternative, when an employer agrees to send a worker on a training course and/or pay for their studies or qualification, the employer’s willingness to fund the training is contingent on the worker signing a clawback agreement with regard to the course fees in the event that the worker decides to leave.

The majority of the time, the employee’s outstanding debt will be subtracted from their final compensation; however, if the sum is significant, further payment arrangements will need to be negotiated. To avoid engaging in illegal deductions, there must be a clear clause allowing for deduction from final amounts or, at the very least, the employee’s written consent.

The bottom line

TRAP is a clause that says that an employee is required to pay back the employer for the cost of their training if they leave the company before a specified deadline. Employees or those on the job hunt need to be aware of TRAP to avoid falling into any problems regarding it.

Vikrant Shetty

July 4, 2023

1:28 pm

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